On July 29, speakers at the OpRisk Asia conference in Singapore acknowledged that culture and conduct risk lay at the root of many operational risk failures, but warned that trying to impose company-wide cultural change could be an impossible task.

Instead, companies should try to drive change by picking a few ‘risk champions’ in each department and linking their compensation to culture and conduct risk metrics, argued Andrew Koh, deputy chief risk control manager at China Construction Bank in Singapore.

“You can’t reward everyone for cultural change, but you can appoint two or three risk champions in every department with key performance indicators for the implementation [of cultural change] and link that to reward or compensation,” Koh said. “Some of them [in China Construction Bank] have gone on to work in op risk as well later because they came to understand it very well … you will need to get HR involved to check that you are in line with hiring and compensation policies. And make it something easy to start with like the department’s risk and control self-assessment [RCSA] passing audit – not something like ‘zero risk incidents in the department’. You can put more objectives in for people who want to do more, to set the bar higher.” Building up the pool of risk-trained staff in each department would have its own advantages, he added: “A lot of banks don’t have a big crop of people to manage risk – and, when they need to react to an incident, you can tell.”

On October 14, 2015 Andrew will be traveling to Hong Kong to speak on the topic of Defending Against Cyber Security Threats To The Payment & Banking System. This topic was also covered in the Third Annual Risk Management Symposium on May 30, 2015.

Even in normal times, individual and institutional investors alike have a hard time figuring out where to invest and in what. Should one invest more in advanced or emerging economies? And which ones? How does one decide when, and in what way, to rebalance one’s portfolio?

Obviously, these choices become harder still in abnormal times, when major global changes occur and central banks follow unconventional policies. But a new, low-cost approach promises to ease the challenge confronting investors in normal and abnormal times alike.

In the asset management industry, there have traditionally been two types of investment strategies: passive and active. The passive approach includes investment in indices that track specific benchmarks, say, the S&P 500 for the United States or an index of advanced economies or emerging-market equities. In effect, one buys the index of the market.

]]>http://blogs.stern.nyu.edu/riskintelligence/?feed=rss2&p=21470Professor Lawrence White on the Implications of Glass-Steagallhttp://blogs.stern.nyu.edu/riskintelligence/?p=2140&utm_source=rss&utm_medium=rss&utm_campaign=professor-lawrence-white-on-the-implications-of-glass-steagall
http://blogs.stern.nyu.edu/riskintelligence/?p=2140#commentsThu, 23 Jul 2015 18:57:28 +0000http://blogs.stern.nyu.edu/riskintelligence/?p=2140Continue reading →]]>The following is an excerpt from Washington Examiner:

The Volcker Rule, criticized for its complexity, has already forced some megabanks to divest in ways they might not have had to under the late-stage versions of Glass-Steagall. Goldman Sachs, for instance, spun off its proprietary trading business in preparing for implementation of the Volcker Rule.

The financial industry would survive, he said, but might not be safer. “If Glass-Steagall, with all of its pristine beauty of 1933, had still been in place, nothing would have been different” in 2008, he said.”

“”It’s a constructive deal, positive for the euro zone, and means that for now, those tail risks that would have led to a more fundamental repricing of euro zone assets should not occur,” Roubini told Reuters in an interview in London.

“You don’t necessarily have to be negative or underweight on the euro zone because there are some of these risks.”

After 17 hours of negotiation, euro zone leaders made Greece surrender much of its sovereignty to outside supervision in return for agreeing to talks on an 86 billion euros bailout to keep the near-bankrupt country in the euro.

A Grexit would call into question the whole euro zone project, which would cease to be a true monetary union and instead turn into a collection of fixed exchange rate regimes. The inevitable question would then be, ‘Who’s next to leave?’.

But that has been avoided, at least for now, lifting the clouds of market and economic uncertainty. As Roubini noted, the euro zone had been performing relatively well in the first few months of the year, according to activity, sentiment and growth indicators.

“The question is, do you have enough time to do the kind of structural reforms that are going to increase potential growth over the medium term?”"

Additional coverage on the Grexit was also published in the Financial Times.

]]>http://blogs.stern.nyu.edu/riskintelligence/?feed=rss2&p=21050Professor Ian Bremmer Explains the Evolution and Costs of Cyber Warfarehttp://blogs.stern.nyu.edu/riskintelligence/?p=2097&utm_source=rss&utm_medium=rss&utm_campaign=professor-ian-bremmer-explains-the-evolution-and-costs-of-cyber-warfare
http://blogs.stern.nyu.edu/riskintelligence/?p=2097#commentsThu, 25 Jun 2015 14:39:21 +0000http://blogs.stern.nyu.edu/riskintelligence/?p=2097Continue reading →]]>The following is an excerpt from an recent op-ed by Professor Ian Bremmer published in TIME:

Hackers aren’t only in the game to damage governments—sometimes good old-fashioned robbery is enough. The FBI had to notify over 3,000 U.S. companies that they were victims of cyber security breaches in 2013. Victims ranged from small banks to major defense contractors to mega retailers. An astounding 7 percent of U.S. organizations lost $1 million or more due to cyber crime in 2013; 19 percent of U.S. entities have claimed losses between $50,000 and $1 million over the same span. Hacking costs the U.S. some $300 billion per year according to some estimates. Worldwide that figure is closer to $445 billion, or a full 1 percent of global income. The research firm Gartner projects that the world will spend $79.9 billion on information security in 2015, with the figure rising to $101 billion in 2018—and that still won’t be enough.